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Cigna (CI) Q4 Earnings Miss, Decline Y/Y on Elevated Claims
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Cigna Corp.’s (CI - Free Report) fourth-quarter 2020 earnings of $3.51 per share missed the Zacks Consensus Estimate by 4.1% and also declined 18.6% year over year. Results suffered escalated COVID-related costs
Cigna’s revenues of $41.7 billion beat the Zacks Consensus Estimate by 4.3% and also grew 14.2% year over year, driven by a higher contribution from its businesses, led by the Evernorth segment.
The company saw a decline of 472000 customers from the prior-year quarter in its medical enrollment to 16.673 million, attributable to lower commercial members.
Selling, general and administrative expense ratio was 8.5, which improved 80 basis points year over year on significant growth in revenues and cost-control measures.
Cigna Corporation Price, Consensus and EPS Surprise
Evernorth Health Services: Adjusted revenues of $30.5 billion were up 19.4% year over year, driven by the insourcing of U.S. Medical pharmacy volumes and strong organic growth including a rise in retail network and specialty pharmacy services.
Operating income of $1.59 billion increased 3.4% year over year, reflecting customer growth, expanded adjusted pharmacy scripts volumes, benefits of effective management of the supply chain and a continued strong performance in specialty pharmacy services, partially offset by higher operating expenses to support growth.
During the quarter, Evernorth fulfilled 388 million adjusted pharmacy, up 19% year over year, driven by the insourcing of U.S. Medical pharmacy volumes and strong organic growth.
U.S. Medical: Earlier called Integrated medical, this segment was renamed in the fourth quarter and reported adjusted revenues of $9.73 billion, up 6% year over year, highlighting customer wins in Medicare Advantage as well as in the Select segment besides premium growth.
Operating income of $328 million declined 54% year over year due to the return of medical utilization to more typical levels and direct COVID-19 costs apart from the expenses involving strategic actions taken by the company to support customers and providers.
International Markets: Adjusted revenues of $1.54 billion were up 7.3% year over year, reflecting consistent business growth. Operating earnings of $91 million were down 41.3% year over year due to costs incurred to support customers and employees, and investments made in the business for future growth.
Group Disability and Other Operations: Adjusted revenues of $1.28 billion were down 0.8% year over year. Operating earnings of $11 million plunged 91% year over year, reflecting elevated claims in Cigna’s Life business, primarily related to the COVID-19 pandemic. On Dec 31, 2020, Cigna completed the sale of its Group Disability and Life business to New York Life for $6.2 billion.
Capital Position
Cigna’s debt-to-capitalization ratio improved to 39. as of Dec 31, 2020 from 42.8 as of Sep 30, 2020.
Shareholders’ equity as of Dec 31 2020 was $50.3 billion, up 11.8% year over year.
In 2020, the company repurchased 21.9 million shares of common stock for $4.1 billion.
2021 Guidance
The company expects adjusted revenues of at least $1.65 billion and earnings per share of $20.
Zacks Rank and Peer Releases
Some other players in the same space that already reported fourth-quarter earnings and surpassed on the same are UnitedHealth Group Inc. (UNH - Free Report) , and Humana Inc. (HUM - Free Report) while Anthem Inc.’s bottom line missed the mark.
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Cigna (CI) Q4 Earnings Miss, Decline Y/Y on Elevated Claims
Cigna Corp.’s (CI - Free Report) fourth-quarter 2020 earnings of $3.51 per share missed the Zacks Consensus Estimate by 4.1% and also declined 18.6% year over year. Results suffered escalated COVID-related costs
Cigna’s revenues of $41.7 billion beat the Zacks Consensus Estimate by 4.3% and also grew 14.2% year over year, driven by a higher contribution from its businesses, led by the Evernorth segment.
The company saw a decline of 472000 customers from the prior-year quarter in its medical enrollment to 16.673 million, attributable to lower commercial members.
Selling, general and administrative expense ratio was 8.5, which improved 80 basis points year over year on significant growth in revenues and cost-control measures.
Cigna Corporation Price, Consensus and EPS Surprise
Cigna Corporation price-consensus-eps-surprise-chart | Cigna Corporation Quote
Strong Segmental Performances
Evernorth Health Services: Adjusted revenues of $30.5 billion were up 19.4% year over year, driven by the insourcing of U.S. Medical pharmacy volumes and strong organic growth including a rise in retail network and specialty pharmacy services.
Operating income of $1.59 billion increased 3.4% year over year, reflecting customer growth, expanded adjusted pharmacy scripts volumes, benefits of effective management of the supply chain and a continued strong performance in specialty pharmacy services, partially offset by higher operating expenses to support growth.
During the quarter, Evernorth fulfilled 388 million adjusted pharmacy, up 19% year over year, driven by the insourcing of U.S. Medical pharmacy volumes and strong organic growth.
U.S. Medical: Earlier called Integrated medical, this segment was renamed in the fourth quarter and reported adjusted revenues of $9.73 billion, up 6% year over year, highlighting customer wins in Medicare Advantage as well as in the Select segment besides premium growth.
Operating income of $328 million declined 54% year over year due to the return of medical utilization to more typical levels and direct COVID-19 costs apart from the expenses involving strategic actions taken by the company to support customers and providers.
International Markets: Adjusted revenues of $1.54 billion were up 7.3% year over year, reflecting consistent business growth.
Operating earnings of $91 million were down 41.3% year over year due to costs incurred to support customers and employees, and investments made in the business for future growth.
Group Disability and Other Operations: Adjusted revenues of $1.28 billion were down 0.8% year over year. Operating earnings of $11 million plunged 91% year over year, reflecting elevated claims in Cigna’s Life business, primarily related to the COVID-19 pandemic. On Dec 31, 2020, Cigna completed the sale of its Group Disability and Life business to New York Life for $6.2 billion.
Capital Position
Cigna’s debt-to-capitalization ratio improved to 39. as of Dec 31, 2020 from 42.8 as of Sep 30, 2020.
Shareholders’ equity as of Dec 31 2020 was $50.3 billion, up 11.8% year over year.
In 2020, the company repurchased 21.9 million shares of common stock for $4.1 billion.
2021 Guidance
The company expects adjusted revenues of at least $1.65 billion and earnings per share of $20.
Zacks Rank and Peer Releases
Some other players in the same space that already reported fourth-quarter earnings and surpassed on the same are UnitedHealth Group Inc. (UNH - Free Report) , and Humana Inc. (HUM - Free Report) while Anthem Inc.’s bottom line missed the mark.
Cigna carries a Zacks Rank #3, currently.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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